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Thread: 95 percent of new companies go bankrupt within three years

  1. #11
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    There are so many variables that take a company down.
    Yes the system of Taxes in DR are complicated in the least wise.
    But the numbers are not out of wack with other Developed Countries.
    Canada for instance as a comparative analysis has some interesting Small Business statistics.
    Small Business 5 to 100 employees.
    5.1 million people work in Small Business. that's 41% of workforce in the Country.
    Small Businesses contribute 30% to GDP.
    But look at these statistics : 85% survive the first 12 months.
    70 % survive the first 2 years

    The point is that the DR with 95% business failure is not too out of line with Developing Countries.
    If DR had Micro-Credit facilities, Small Business Training , Better access to Government systems ; simplified tax facilities ; they could very well be right up there with the rest of the gang.
    In the past I was privileged to live and work in a Cree Native community in Northern Canada.
    It was much the same when it came to small business ventures.
    Most times the business ventures failed right around Hunting and Fishing season.
    That was due to culture.
    The concept of ''Profit'' was new to their culture ; they blew the surplus funds on frivolous things....
    Same here in DR!
    Being a F.CIM,, C.Mgr. (Fellow of the Canadian Institute of Management and Chartered Manager ,, with 90% of my work in small business over the past 35 years I have a pretty good outlook on the subject.

    Ie, One business starts and a dozen more under capitalized initiatives duplicate the initiative.... every one looses.
    One of the 5% that makes it to 5th year is far too profitable so the Bigger companies who serve the same clients ''force them out of business''. Either in friendly or hostile takeovers .

    It's a crap shoot , and the DR is of no exception to the rule.
    I wish I had the stats on Small Businesses in USA. Would ne interesting.

    Russell

  2. #12
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    i cant even imgine what business to start here

  3. #13
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    Look for an obvious need , analyze the pros and cons, determine if the business can be easily cloned, then look at the 3M's

    Management
    Market
    Money

    Plan to spend about 12 hours a day on the project
    Trust no one you hire to be loyal and in your best interests.
    For a micro-enterprise (up to 4 employees) expect to earn, after expenses, about 40 pesos an hour.

    Really!
    Is that called retirement?

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  5. #14
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    Quote Originally Posted by Drperson View Post
    i cant even imgine what business to start here
    Trust me, that is a good thing.

  6. #15
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    The biggest problem I've found runnning businesses in the DR is the fact that most of your competition doesn't play by the same rules.. If I have a furniture factory and pay all corresponding taxes/liquidation/etc and my competition doesn't pay any of that and makes their furniture in their "patio", none of their employees have insurance, nobody gets liquidated, they don't pay income taxes, it means that my competition can sell the same product for 40% lower than I can using the same materials.. Playing by the rules here is definitely an uphill battle but if you can persevere over time you can come out on top!

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  8. #16
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    Also, a consumer is NOT willing to pay a premium because a business is registered/legal.. they just want the best price..

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  10. #17
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    Quote Originally Posted by TropicalPaul View Post
    As someone who runs a small business here, I think the biggest problem is that all the TSS and DGII rules are so complicated and there is nobody who can tell you how to do things. Nobody gives you training, no manuals. I'm from the UK and when you set up a company here, the tax authorities invite you to training sessions, also available online, and they really push you to go so that you understand how to calculate the taxes, what you can claim and not claim. And then you have a named person to call if you have questions. In Dom Rep it's 200 times more complicated and zero help. The approach is designed to help you make mistakes and when you do make a mistake you are treated like a criminal.

    One example is Christmas pay. It took me 5 years before I realised that you can declare the amount you pay in Christmas pay to the TSS, and you get a credit against your profit tax for this. It's buried in a help screen, you can only do this in December, not afterwards, and when you do enter the amounts of Christmas pay, you have to take a screenshot as there is no way of checking what you entered in the TSS system afterwards. Just to do basic accounts and pay tax I've had to pay a programmer to write specialist software for us.
    I would highly suggest hiring an accountant on iguala (monthly stipend) if you haven't done so already.. you could do everything PERFECTLY on your end and if you don't have an accountant that's registered they will find problems with what you've done.

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  12. #18
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    Quote Originally Posted by Drperson View Post
    i cant even imgine what business to start here
    Buy a fleet of used Hyundai's, fill the trunks with pharmaceutical products and cruise the streets that have the busiest bars. Guaranteed to make buckets of cash.
    Keep a few pesos handy for the local cops and your on your way to untold wealth.

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  14. #19
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    Quote Originally Posted by melphis View Post
    Buy a fleet of used Hyundai's, fill the trunks with pharmaceutical products and cruise the streets that have the busiest bars. Guaranteed to make buckets of cash.
    Keep a few pesos handy for the local cops and your on your way to untold wealth.
    This is not a joke!
    Some of the most successful micro-enterprises with the highest profit margins are run out of trucks and converted vans. This phenomena is world wide,by the way.
    Russell

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  16. #20
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    Quote Originally Posted by sayanora View Post
    I would highly suggest hiring an accountant on iguala (monthly stipend) if you haven't done so already.. you could do everything PERFECTLY on your end and if you don't have an accountant that's registered they will find problems with what you've done.
    that's exactly what we do. We have an accountant/administrator who prepares everything for the accountant and he figures out the income tax....etc. Our person does the TSS.....etc. Our competition for the most part doesn't pay income tax at all so that puts us at a slight disadvantage but we try to provide a better product and so far it has been successful.

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